Is MercadoLibre Inc. (MELI) overvalued?
On Equity Rank's model estimate, MELI trades close to its fair value (2% below it). MercadoLibre Inc. (MELI) last closed at $1,510.00; the multi-method model fair value is $1,536.16.
| Price | Model fair value | Price vs model |
|---|---|---|
| $1510.00 | $1536.16 | 2% below |
What the answer rests on
- 2 of 8 valuation methods put MELI's value above its price and 6 put it below, so the methods mostly agree.
- To justify today's price, MELI's free cash flow would need to grow about -3.4% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 63.1% a year.
- MELI trades at 47.3 times its last year's earnings, against a median of 32.5 for 10 profitable E-Commerce companies.
- Over the past year the price sat below the model fair value on 86% of trading days. The gap ranged from 16% below to 7% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind MELI's fair value · What prices assume · Other companies